/Docs/G/500Startups-KISS-CmA/Sec/Def/0.md
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Definitions
>- "{{Conversion_Shares}}" shall mean:
- with respect to a conversion pursuant to {{Conversion.Equity.Xref}}, shares of {{Preferred_Stock}} issued in the {{Next_Equity_Financing}}; provided, however, that, at {{the_Company}}'s election, "{{Conversion_Shares}}" with respect to a conversion pursuant to {{Conversion.Equity.Xref}} shall mean shares of a {{Shadow_Series}};
- with respect to a conversion pursuant to {{Conversion.Corporate.Xref}}, shares of {{Common_Stock}}; and
- with respect to a conversion pursuant to {{Conversion.Maturity.Xref}}, shares of a newly created series of {{the_Company}}'s {{Series_Seed_Preferred_Stock}}, upon the terms and provisions set forth in the most recent version of the Series Seed documents posted at www.seriesseed.com (or if not so posted, as reasonably agreed by {{the_Company}} and a {{Majority_in_Interest}}); provided that, for the avoidance of doubt, the {{Conversion_Price}} shall be determined pursuant to {{Def.Xref}}.2.3).
>"{{Conversion_Price}}" shall equal:- with respect to a conversion pursuant to {{Conversion.Equity.Xref}}, the lower of (A) the product of (1) one (1) minus the {{Discount}} and (2) the price paid per share for {{Preferred_Stock}} by the investors in the {{Next_Equity_Financing}} or (B) the quotient resulting from dividing (1) the Valuation Cap by (2) the {{Fully-Diluted_Capitalization}} immediately prior to the closing of the {{Next_Equity_Financing}};
- with respect to a conversion pursuant to {{Conversion.Corporate.Xref}}, the quotient resulting from dividing (A) the Valuation Cap by (B) the {{Fully-Diluted_Capitalization}} immediately prior to the closing of the {{Corporate_Transaction}}; and
- with respect to a conversion pursuant to {{Conversion.Maturity.Xref}}, the quotient resulting from dividing (A) the Valuation Cap by (B) the {{Fully-Diluted_Capitalization}} immediately prior to the conversion.
>"{{Corporate_Transaction}}" shall mean:- the closing of the sale, transfer or other disposition of all or substantially all of {{the_Company}}'s assets,
- the consummation of the merger or consolidation of {{the_Company}} with or into another entity (except a merger or consolidation in which the holders of capital stock of {{the_Company}} immediately prior to such merger or consolidation continue to hold at least 50% of the voting power of the capital stock of {{the_Company}} or the surviving or acquiring entity),
- the closing of the transfer (whether by merger, consolidation or otherwise), in one transaction or a series of related transactions, to a person or group of affiliated persons (other than an underwriter of {{the_Company}}'s securities), of {{the_Company}}'s securities if, after such closing, such person or group of affiliated persons would hold 50% or more of the outstanding voting stock of {{the_Company}} (or the surviving or acquiring entity), or
- the liquidation, dissolution or winding up of {{the_Company}};
provided, however, that a transaction shall not constitute a {{Corporate_Transaction}} if its sole purpose is to change the state of {{the_Company}}'s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held {{the_Company}}'s securities immediately prior to such transaction. Notwithstanding the prior sentence, the sale of shares of {{Preferred_Stock}} in a bona fide financing transaction shall not be deemed a "{{Corporate_Transaction}}.""{{Corporate_Transaction_Payment}}" shall mean an amount equal to all accrued and unpaid interest due on this {{KISS}} plus two times (2X) the {{Purchase_Price}}."{{Discount}}" shall mean {{Discount.%}}."{{Equity_Securities}}" shall mean {{the_Company}}'s Common Stock ("{{Common_Stock}}") or {{the_Company}}'s Preferred Stock ("{{Preferred_Stock}}") or any securities conferring the right to purchase {{the_Common_Stock_or_Preferred_Stock}} or securities convertible into, or exchangeable for (with or without additional consideration), {{the_Common_Stock_or_Preferred_Stock}}, except any security granted, issued and/or sold by {{the_Company}} to any director, officer, employee or consultant of {{the_Company}} in such capacity for the primary purpose of soliciting or retaining their services."{{Financial_Statements}}" shall mean an income statement, balance sheet, statement of stockholder's equity, and/or a statement of cash flows, in each case as of the end of (i) each of the first three (3) fiscal quarters and (ii) each fiscal year of {{the_Company}}."{{Fully-Diluted_Capitalization}}" shall mean the number of shares of outstanding {{Common_Stock}} on a fully-diluted basis, including (i) conversion or exercise of all securities convertible into or exercisable for {{Common_Stock}}, (ii) exercise of all outstanding options and warrants to purchase {{Common_Stock}} and, in the case of {{Def.Xref}}.2.1 and {{Def.Xref}}.2.3 only, (iii) the shares reserved or authorized for issuance under {{the_Company}}'s existing stock option plan or any stock option plan created or increased in connection with such transaction; but excluding, for this purpose, the conversion contemplated by the applicable provision of {{Conversion.Xref}}."{{Holder}}" shall mean a member of the {{KISS_Group}} that holds a {{KISS}} (including, without limitation, {{the_Investor}}, for so long as {{the_Investor}} holds this {{KISS}})."{{Interest_Rate}}" shall mean a rate of four percent (4%) per annum, compounded annually."{{KISS}}" or "{{KISSes}}" shall mean the {{KISS}} instruments issued by {{the_Company}} to {{Holders}} in the form hereof."{{KISS_Group}}" shall mean the holders of all {{KISSes}} in the {{Series}}, collectively."{{Majority_in_Interest}}" shall mean members of the {{KISS_Group}} holding a majority in interest of the aggregate {{Purchase_Prices}} of all {{KISSes}} in the {{Series}}."{{Maturity_Date}}" shall mean the date that is eighteen (18) months following the {{Date_of_Issuance}}."{{Next_Equity_Financing}}" shall mean the next sale (or series of related sales) by {{the_Company}} of its {{Preferred_Stock}} following the {{Date_of_Issuance}} from which {{the_Company}} receives gross proceeds of not less than $1,000,000 (excluding the aggregate amount of securities converted into {{Preferred_Stock}} in connection with such sale (or series of related sales))."{{Participation_Amount}}" shall mean an amount in US dollars equal to one times (1X) the {{Purchase_Price}}. "{{Shadow_Series}}" shall mean shares of a series of {{Preferred_Stock}} that is identical in all respects to the shares of {{Preferred_Stock}} issued in the {{Next_Equity_Financing}} (e.g., if {{the_Company}} sells {{Series_A_Preferred_Stock}} in the {{Next_Equity_Financing}}, the {{Shadow_Series}} would be Series A-1 Preferred Stock), except that the liquidation preference per share of the {{Shadow_Series}} shall equal the {{Conversion_Price}} (as determined pursuant to {{Def.Xref}}.2.1), with corresponding adjustments to any price-based antidilution and dividend rights provisions."{{Valuation_Cap}}" shall mean {{ValuationCap.$}}>